Discount Life Insurance

How discounting by a broker can make their middleman status of great value to you the consumer.

Discount life insurance isn’t a tacky second best- it’s the process whereby brokers pass on some of the commission they get paid by the life office back to you. This can reduce your premiums and may influence your choice of policy.

Buying discount life insurance doesn’t mean you’re getting less cover with your policy. Equally, buying a policy that isn’t discounted doesn’t necessarily mean it’s a better policy. The only way to ensure you get the right level of cover and policy value for your needs is to read the small print in the contract.

On the contrary, the term “discount life insurance” isn’t a quality statement at all- it refers to a technique used by brokers to give you better value for money. Almost invariably, a broker will give you as good as or a better deal than if you were to approach a life company directly. One of the ways they do this is by discounting. This doesn’t mean knocking money off your contribution to the policy. Rather, it means refunding to you, across the life of a policy, some of the commission that would ordinarily be theirs. In this way, you effectively get cheaper premiums, and it’s the brokers who tighten their belts.

The concept of discount life insurance has led to a highly competitive marketplace for longer policies, and whilst you should certainly take advantage of discounting, you need to ensure that you still purchase a product which matches your requirements- it’s very rare that price alone is the defining factor.